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E20.2 (LO2), AN Gruden Company produces golf dises which it normally sells to retailers for $7 each. The cost of manufacturing 20,000 golf dises is:

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E20.2 (LO2), AN Gruden Company produces golf dises which it normally sells to retailers for $7 each. The cost of manufacturing 20,000 golf dises is: Use incremental analysis for special \$order decision. Gruden also incurs 5% sales commission ( $0.35 ) on each disc sold. MeGee Corporation offers Gruden $4.80 per disc for 5,000 dises. MeGee would sell the dises under its own brand name in foreign markets not yet served by Gruden. If Gruden acepts the offer, its fixed overhead will increase from $40,000 to $46,000 due to the purchase of a new imprinting machine. No sales commission will result from the special order. Instructions a. Prepare an incremental analysis for the special order. b. Should Gruden accept the special order? Why or why not? c. What assumptions underlie the decision made in part (b)

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